Letters to the Editor

Colorado school finance revamp next takes tax increase to voters

Colorado Classroom covers local and state education issues affecting K-12 and higher education students in the state of Colorado.

After two years of meetings, countless hours of stakeholder discussions, painstaking creation of a bill and then an arduous slog through the legislative process, the overhauled Public School Finance Act now heads into the home stretch — a sprint toward the November ballot.

There, voters statewide will either embrace an estimated $1.1 billion tax increase necessary to trigger the revamped formula for distributing education funds or hand a crushing defeat to its architects.

Meanwhile, the bipartisan coalition that laid the groundwork for what became Senate Bill 213 — and cleared legislative hurdles last week — must now settle on a taxing mechanism they can sell to voters.

The task has revealed ideological fault lines.

Among the 16 proposed ballot initiatives submitted to the Secretary of State's office by the coalition are variations that include a higher flat income tax, a two- or five-tiered setup based on taxpayer income and options that tweak various other state laws.

"We've got to define one that builds the strongest coalition," said state Sen. Mike Johnston, D-Denver, who spearheaded the legislative effort. "There's a sense from people that everyone should have some skin in the game, and almost all the tax measures offer that."

Members of the group that worked on the foundation for the school finance revision will regroup to hash out differences on the ballot question before they begin mustering support — they need to collect 86,105 valid signatures by an Aug. 5 deadline.

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"Now we're going to be meeting and talking with all of our partners in this and come to what's always a painful consensus around what we think we can market to the people of Colorado," said Gail Klapper, a director at the Colorado Forum, which is taking a lead role in the initiative process.

"We all understand that if we're going to be a successful economic generator, we have to have a strong school system," she added. "That's something that not only both parties support, but all our citizens support."

Some groups already are staking out territory in the initiative discussion.

Colorado Concern, a reform-minded collection of CEOs who advocate for business, has backed measures like Johnston's educator accountability bill and the READ Act that promotes K-3 literacy. And they see many components of the new school finance formula as a step in the right direction.

But the organization hasn't taken a position on whether it will support a tax increase initiative. However, if the ballot question calls for any kind of a graduated tax schedule, president and CEO Tamra Ward said Colorado Concern won't support it.

She says that economic development experts tell her that when it comes to recruiting companies to Colorado, one of the key elements in the state's "tool box" is the flat state income tax.

"You'll have some folks say yes (to a tax increase) and some say that any increase is problematic in this economy," she said. "But if you're talking about a graduated tax, I know where our folks line up."

The Denver Metro Chamber of Commerce hasn't yet taken a position on a particular form of tax increase, but spokeswoman Kate Horle said that, historically, the group also has favored a flat tax.

"If we have a challenge we need to solve with a tax issue, then we should come together as a community to solve it," she said. "It has been our philosophy for a long time that we really do believe a flat tax means that everybody participates and everybody has a stake in community solutions."

Johnston speculated that the issue most likely will come down to either a higher flat tax rate — from the current 4.63 percent to 5.35 percent — or the two-step proposal.

"Between those," he said, "I think that the two-step is a slightly stronger version, but it requires negotiation and compromise."

Gov. John Hickenlooper, who is expected to sign the bill, was noncommittal on the question of the tax initiative. According to a spokesman, the governor is "working on the best path forward."

Despite the fact that SB 213 didn't garner a single Republican vote to advance it, proponents like Chris Watney of the Colorado Children's Campaign, a leader in the consortium known as the Colorado School Finance Partnership, take heart that many elements of the new formula had clear bipartisan support.

"When you're talking about differences these measures make for students across the state," she said, "a lot of them were supported by a pretty conservative group of policymakers."

Johnston noted that even though he took pains to separate the policy issues in SB 213 from the tax initiative that would trigger it, political realities in the legislature made that a tall order.

"Under the Capitol, debate takes on a different tenor, with partisan challenges on new revenue, even if it's good policy," he said. "I think this coalition will get far broader, more quickly, as we leave the Capitol."

Once supporters whittle down the array of ballot titles to a single question, their task will shift to crafting a message with resonance for diverse taxpayers across the state.

For Watney, the new law's strength is in its complexity, but the challenge will come in explaining how all the different pieces work together to improve education.

"I'll be spending a good chunk of the summer and fall visiting with people across the state about why this is the most important education initiative in 20 years," Watney said.

So will Johnston, who notes that the complicated formula can be distilled to essential education elements — adequate and equitable funding, fairness and accountability — that voters will understand and support.

"At its heart, it's about translating complex formulas into simple outcomes for kids," he said. "The question is, can we communicate to voters why it's worth the investment, even in hard economic times."

The last statewide effort to raise tax revenue for education, Sen. Rollie Heath's Proposition 103 in 2011, failed by a large margin. That measure sought to increase the flat income tax rate to 5 percent and slightly increase state sales tax for five years to fund education.

But Klapper maintains that this year's initiative effort benefits from being coupled with recent education reforms like teacher accountability and early literacy programs.

"Prop 103 didn't have the tie to a very robust school improvement plan, maybe the best in this country," she said. "I see those two as very different."

Johnston figures that the proponents of the school finance reform legislation are in a "great spot."

"The coalition is far stronger than when the legislative process started," he said. "There will be areas of disagreement about the ballot title, but I think there's now a growing sense of urgency, that people believe that there is a chance to make this happen and want to come together to make sure it does."

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